RaymondsIndex

■ What Happened Today Korea's Financial Services Commission (FSC) officially activated Phase 1 of its landmark delisting reform on April 1, 2026 Up to 150 KOSDAQ companies are now subject to accelerated exit procedures under streamlined regulatory timelines From July 1, 2026, market capitalization requirements rise to ₩20 billion for KOSDAQ; KOSPI requirements will reach ₩50 billion by 2028 A new dynamic stock price floor (₩1,000 minimum) is also being phased in, with automatic delisting triggers if breached for 45 of 90 consecutive trading days ■ The Global Signal: Activist Investors Are Already Here Hong Kong-based Oasis Management declared HORIBA's March 2026 AGM a "clear warning to the board" — one of the most direct activist signals in recent East Asian corporate history HORIBA's board had rejected Oasis's governance demands, yet 2026 AGM voting results revealed deep minority shareholder dissent, validating Oasis's campaign Simultaneously,...

 ■ The Super AGM Season Is Over. The Real Test Begins Now. Korea's 2026 "super AGM season" just closed — and by most accounts, it was the most consequential in a decade. Facing a once-in-a-generation overhaul of the Commercial Act, listed companies scrambled to revise articles of incorporation, reconstitute boards, and pre-empt an increasingly assertive shareholder activism movement. The headline reforms are now well documented: - The 3% rule for audit committee appointments tightens on July 23, capping controlling shareholders and their associates at 3% of voting rights in director elections - Mandatory concentrated voting (집중투표제) takes effect September 10, enabling minority shareholders to more effectively elect directors of their choosing - Independent directors must now constitute at least one-third of the board, up from one-quarter - Companies must publicly disclose approval and rejection vote counts for every resolution ■ The Question Nobody Is Asking Most analysts ...

■ The Wake-Up Call When activist hedge fund Elliott Investment Management disclosed a "significant" stake in Japanese shipping giant Mitsui OSK Lines on March 17, 2026, shares jumped 12% in a single session. No earnings surprise. No product announcement. No macro catalyst. Just a governance signal—and the market knew exactly what it meant. Elliott's demands were precise: review the real estate portfolio, relist subsidiary Daibiru (which was quietly taken private in 2022), and ensure the upcoming mid-term management plan is "appropriately ambitious." Mitsui OSK shares hit record highs. The financial statements hadn't moved. The relationships had. ■ Relational Risk in Action This is the core insight behind 20 years of Korean M&A PMI work: financial statements are lagging indicators. By the time the numbers deteriorate, the relational structure has already telegraphed the outcome. Elliott didn't build its thesis from quarterly P&L analys...

  ■ The Discount That Said Everything In February 2026, Yuil Energytech's controlling shareholder sold a 17.42% stake at ₩917 per share—a 32% discount to the prevailing market price of ₩1,355. The buyer was SJ Holdings' Private Investment Partnership No. 4: a private equity vehicle acquiring distressed control at a steep haircut. This is not a story about one company. This is a story about what financial statements don't show until it's too late. ■ The Lagging Problem with Financial Data Yuil Energytech's accumulated deficit at the time of sale: ₩21.3 billion. Operating losses in each of the prior three years. Net loss in the most recent year: ₩9 billion. These numbers arrived after the fact. Balance sheets are rear-view mirrors. They tell you where a company has been, not where its relationships are fracturing right now. Relational Risk—the measurable erosion of a company's governance, human, and funding networks—signals distress months before financial s...

■ The Headline Surprised Markets. The Signals Didn't. On March 26, 2026, Hanwha Solutions announced a ₩2.4 trillion (~$1.7 billion) rights offering — one of the largest equity dilutions in Korea's recent corporate history. The stock plunged nearly 20% in a single session. Analysts were surprised. Retail investors were angry. Commentators questioned timing. But for anyone watching the relational layer of Hanwha Solutions' governance, the surprise was that anyone was surprised. ■ What Happened Before the Announcement Two days before the public disclosure, Hanwha Solutions amended its articles of incorporation — specifically expanding the board's authority to approve equity issuances without a prior shareholder vote. This is a textbook Governance Risk indicator: a structural change to internal decision-making rules that precedes a major capital event. The fuller picture: - Governance Risk signal: Articles of incorporation amended 48 hours pre-announcement - Funding R...

This week's highest Relational Risk Score firms across KOSPI and KOSDAQ. Ranked by composite RRS, incorporating Governance Risk, Human Risk, and Funding Risk signals observed in public filings from March 17–26, 2026. Three structural shifts are driving this week's elevated risk readings: KOSDAQ delisting criteria tightened — market cap threshold raised to ₩15B (Jan 2026), rising to ₩20B in July. 220+ penny-stock firms now inside the danger zone. Audit season concentrated risk — KOSPI 14 firms and KOSDAQ 43 firms reported qualified or adverse audit opinions for FY2025. CB issuance patterns intensifying — related-party CB allocations and conversion overhangs signaling classic Funding Risk sequences. Rank Sector / Type Market Est. WP% RRS Zone Signal Key Risk Factor Trigger Event 1 Battery materials · Mid-cap KOSDAQ 91% D 6/6 Funding + Governance CEO's personal entity received new CB allocation; existing CB offloaded to SPC at below-market terms. Audit report...

■ The Headline That Isn't Really About Japan On March 18, 2026, Mitsui OSK Lines shares surged 11% to a record high. The catalyst: Elliott Investment Management disclosed a "significant" stake in the Japanese shipping giant — its latest move in a Japan activism spree that already includes Kansai Electric Power (top-3 shareholder), Toyota Industries, Tokyo Gas, and Sumitomo Realty & Development. Meanwhile, data from Nikkei Asia shows that Japan recorded 56 activist campaigns in 2025 — the busiest year on record and nearly half of all activist activity globally outside the United States. In 2026, the Tokyo Stock Exchange takes the final step in its governance reform push: initiating delisting procedures for companies that failed to make meaningful improvements to capital efficiency and board independence. This is not a Japan story. It is a preview of what is happening across Asia — including Korea. ■ The Pattern Elliott Follows Elliott does not buy into a comp...

■ The Regulatory Storm Has Arrived Korea's Financial Services Commission has launched its most aggressive delisting campaign in a generation. The numbers are stark: Up to 150 KOSDAQ companies face forced exit under an accelerated review program running February 2026 to June 2027 Market cap thresholds surge from ₩4B to ₩15B (January 2026) and then ₩20B (July 2026) — a 5× increase in 18 months New mandatory tender offer rules: acquiring 25%+ of a listed company now triggers a mandatory public buyout covering up to 50%+1 share Commercial Code amendment (effective July 2026): controlling shareholders capped at 3% voting rights on audit committee elections, and all KOSPI-listed companies must file governance reports ■ The Financial Disclosure Blind Spot Standard analysis focuses on these regulatory triggers. But 20 years running M&A PMI transactions across Korea has taught me something investors consistently miss: companies don't fal...

Keywords: Korean M&A, Relational Risk, cross-border investment Korea, Korea Zinc shareholder dispute, KONNECT Introduction: When Relationships Become the Risk On March 24, 2026, shareholders of Korea Zinc — one of the world's largest zinc smelters — gather to vote on whether Chairman Yun B. Choi retains his board seat. The coalition opposing him controls more than 41% of the vote. Global pension funds have weighed in. Korea's own National Pension Service has gone conspicuously silent. For most observers, this is a governance story. For KONNECT, it is something more precise: a live demonstration of Relational Risk — the category of investment risk that emerges not from financial deterioration, but from the fracturing of the human relationships that hold a company together. What Is Relational Risk? Raymond Park (박재준), founder of KONNECT and creator of the Relational Risk framework, spent 20 years leading M&A Post-Merger Integration (PMI) engagements across Kore...

Part 3 — Simulating corporate analysis judgments with CEI + CGI ​ <Quadrant Matrix> ​ Area A (CEI high + CGI high) — Really good company Assets are efficient and funds raised are properly invested in the business. Suitable for long-term holding. ​ Zone B (CEI high + CGI low) — Outwardly superior company ← Most risky The financial statements are clean and asset efficiency is good, but money is not spent on business after issuing CB. The analyst report is also positive, but the CB interest play cycle has already begun. Immediate alert if CGI falls for three consecutive quarters. ​ Zone C (low CEI + high CGI) — Likely to be a company undergoing growth investment Cash is used properly in business, but efficiency is still low. This may be immediately after investment in factories and facilities. The criterion for judgment is whether CEI has improved after 12 months. ​ Zone D (low CEI + low CGI) — Immediate review If two things are bad at the same time, it is most likely not a coincide...

Part 4 — Practical Checklist ​ Step 1. Enter item code at konnect-ai.net → Check CEI/CGI scores → Determine Zone Step 2. Trends are more important than scores. Check quarterly changes for at least three quarters. Step 3. Intensive surveillance items for companies in Area B:     • Number of CB issuances in the last 3 years     • Is the main acquirer of CB the same entity?     • Quarterly trend of raised funds conversion rate     • Are any of the executives previously employed in managed stocks or publicly traded companies? ​ Step 4. Crosstab:     • Area D + poor executive history → highest risk     • Area B + repeat CB acquirer is the same corporation → structural interest play confirmed ​ ​ In conclusion Financial statements don't lie. But it doesn't even tell the whole truth. The 10-year average stock price performance of companies (Area A) that excel in both CEI and CGI exceeds KOSPI by 5.6% points per year. Among companies i...

Top 10 Relational Risks in 2026, 1st week of March  Category Company name market Comprehensive Score WP R.R.S. signal 30-day stock price 1 year stock price Key risk factors 1 Adbiotech KOSDAQ 64.0 79.5% 6.0 0 -17.6% -14.8% CB/capital 313.8% 2 Aju Steel KOSPI 62.0 86.5% 9.3 4 -2.8% -19.7% EGM, CB 44.9% 3 CHA Biotech KOSDAQ 59.0 77.3% 8.6 2 +7.4% +103.7% Bio-CB dependence 4 Hanul & Jeju KOSDAQ 58.0 85.1% 10.6 2 -21.1% -53.3% CB/capital 520.1% 5 HLBGenex KOSDAQ 57.9 79.1% 7.3 1 -7.0% -34.0% CB/capital 238.0% 6 HLB Pep KOSDAQ 54.9 85.2% 7.1 2 -12.7% +7.9% CB/capital 743.3%, managed items 7 SKAI KOSDAQ 54.0 85.1% 10.2 3 +33.9% -20.9% CB/capital 342.1% 8 Nexus KOSDAQ 53.9 86.8% 8.8 2 -24.0% -37.2% CB/capital 128.1% 9 rolling stone KOSDAQ 53.0 88.6% 15.9 5 -23.0% -57.0% EGM+Dispute+Large 3+CB79% 10 Bitmex ...

Why investments fail if you only rely on financial statements Financial statements are ‘results’. It is not the ‘cause’ of the crisis. ​ ■ Intrinsic limitations of financial statements - Financial statements = lagging indicators that record the results of past events - According to accounting recognition standards, there is a lag of several months to several years between the actual risk occurrence and the time of disclosure. - Accounting fraud: Numbers can be intentionally manipulated → Financial statements may be the numbers you want to show. - Preliminary risks cannot be detected solely through disclosures reported to the Financial Supervisory Service's Electronic Disclosure System (DART). ​ ■ The truth that data tells - RaymondsRisk v1.1 analysis results (data base date: 2026-02-21) · Analysis of 3,109 companies across all KOSPI and KOSDAQ stocks · 85.9% of the 276 companies with actual trading suspensions were detected in advance in the high-risk group · Cohen d analysis: In r...

■ Introduction to the paper - Title: Trade-Based Pump-and-Dump and Profitability - Author: EJ Lee, R Kim - Data: Second-level order and transaction data for all stocks of the Korea Exchange (KRX) (can be identified at the account level) - Source: SSRN Working Paper ​ ■ What the paper proves - Empirical analysis of pump-and-dump stock price manipulation patterns using actual order and transaction data for all stocks on the Korea Exchange - Identify manipulation forces on an account-by-account basis → Prove that the operation is not just a rumor, but an act that can be traced through data - Quantifying the profitability of stock price manipulation → Identifying a structure in which manipulation is repeated because it is profitable - Core pattern: Power buys first (pump) → induces the stock price to rise → sells (dumps) the quantity at the high point → individuals receive the quantity ​ ■ Evangelist Empathy: This is not an accident, it is a design - As the paper reveals, the manipulation ...

​ ■ Introduction to the paper - Title: Three Essays on Corporate Governance - Author: DR Yang - Source: Seoul National University doctoral thesis, 2017 - Original text: https://s-space.snu.ac.kr/handle/10371/119397 ​ ■ What the paper reveals — 3 demonstrations ​ [1] Outside directors are not monitors - Outside directors selectively do not participate in board decisions that may be problematic. - The purpose is not to protect minority shareholders, but to minimize one’s own legal risks. - Conclusion: The outside director system does not keep controlling shareholders in check. ​ [2] Controlling shareholders use listed companies as real estate channels (key) - Controlling shareholders dispose of or acquire their real estate through listed companies - The transaction price is set to benefit only controlling shareholders → Minority shareholders suffer losses - This is tunneling: the act of controlling shareholders transferring corporate assets for personal gain. - Empirical analysis using d...

​ ■ Introduction to the paper - Title: When Are Convertible Bonds Converted? - Author: Heo Seo-young - Source: Seoul National University Master’s Thesis, 2025 - Data: Analysis of all 1,146 Korean CBs issued from 2017 to 2019 ​ ■ What the paper reveals — How do CBs rob individual investors? ​ [1] Structure of Refixing CB - General CB: Conversion when stock prices rise → Bond investors convert to stocks to realize profits - Refixing CB: Adjust conversion price downward when stock price falls → Conversion possible even when stock price falls - Result: Stock price falls → Conversion price adjustment → More shares issuance → Stock price falls further → Conversion price adjustment again - This structure is called the Death Spiral. ​ [2] What the data proves - Refixing CBs have a higher conversion rate — CB investors convert even when stock prices fall - Immediately after announcement of refixing CB issuance → stock price cumulative abnormal return (CAR) significantly decreased - The operatin...

​ ■ Introduction to the paper - Title: Corporate Networks - Authors: WK Carroll, MJ Huijzer, JP Sapinski - Source: Handbook of Social Network Analysis, 2024 - See also: Park & Oh, "The Core of Board Networks and Firm Value", Frontiers in Physics, 2023 ​ ■ What is Interlocking Directorate? - A structure in which one person participates in two or more corporate boards of directors simultaneously - Director of company A concurrently serves as director of company B → A and B share the same directorship - When these connections are formed across multiple companies → a corporate network is created. - In 1905, it was first demonstrated that Germany's six largest banks had 1,350 concurrent director connections with industry. ​ ■ What the paper reveals — Concurrently serving as a director is a guide to capital power - Concurrent director network = realistic terrain of capital relations - As capital becomes more concentrated, the director network is also concentrated around a f...

​ Investors who trust financial statements are like driving with their eyes in the rear-view mirror. Numbers are a record of events that have already ended. The real danger begins with relationships, not numbers. ​ ■ 1. When capital is concentrated, relationships are also concentrated. ​ As Piketty warned in Capital in the 21st Century, the rate of return on capital structurally outpaces economic growth. Capital is concentrated. And concentrated capital inevitably creates a network of relationships. ​ Carroll, Huijzer, and Sapinski (2024) synthesized 100 years of corporate network research and stated: The interlocking directorate network is the real terrain of capital relations. A group with more capital controls more corporate boards of directors and intervenes in more corporate decision-making. ​ Korea is no exception. As a result of RaymondsRisk v1.1 analysis, which tracked 49,446 executives of all KOSPI and KOSDAQ companies, changes in executive networks generated abnormal signals ...

​ Relational risk is a risk assessment methodology that detects investment risks in advance by analyzing changes in a company's executive network, funding structure, and governance structure as leading indicators. ​ ■ Limitations of existing investment analysis ​ - Financial statements: Lagging indicators that record the results of past events - Technical analysis (charts): patterns of price and volume — also lagging indicators - Both send signals only after danger has already occurred. - In the Korean stock market, companies whose financial statements appear to be normal until delisting repeatedly occur. ​ ■ Definition of relational risk ​ A corporate crisis begins with relationships rather than numbers. ​ Executives are replaced, funds from specific groups flow in through CBs (convertible bonds), and the governance structure is shaken. These changes appear months to years before they are reflected in financial statements. Relational risk analysis is to quantify changes in this re...

key questions ​ Why do some companies' stock prices plummet just before delisting? Do controlling shareholders really suffer ‘losses’ during the delisting process? Why are individual investors always left last? ​ ​ Paper Overview ​ Title: Stock Market Delistings and Company Undervaluation Author: B. Schwetzler, P. Pollmann Source: SSRN Working Paper, 2024 Analysis target: Stock price, share structure, and pattern of damage to minority shareholders of delisting (including voluntary delisting) companies ​ ​ Key Finding: Cryptocurrency Designs Undervaluation ​ In the process of voluntary delisting, the controlling shareholder proposes a low-price tender offer to minority shareholders. The tender offer price is often discounted compared to the market price. Minority shareholders have the dilemma of holding on to illiquid shares if they sell them before delisting or not. Result: Minority shareholders' wealth is transferred to controlling shareholders. ​ ​ Even if there are regulatio...

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